Author: The Editorial Team

JOHANNEBURG (Capital Markets in Africa) – Who’s afraid of a weaker rand? Not the South African Reserve Bank, according to a new study examining the pass-through of currency fluctuations to inflation. The authors set out to find out why the correlation between the exchange rate and price growth has weakened in the past two decades, which coincided with South Africa adopting an inflation-targeting policy. They conclude that the central bank’s credibility is the main determinant. “Improving monetary-policy…

LAGOS (Capital Markets in Africa) – The Nigerian central bank is “in the mood” for tightening and will increase its main interest rate if inflation doesn’t slow, Deputy GovernorJoseph Nnanna said. “Every member of the Monetary Policy Committee is certain that the monetary policy rate should increase if inflationary pressures build up,” Nnanna said Monday, speaking on the sidelines of a conference in the resort city of Sharm El-Sheikh in Egypt. “Our intention is to ensure that the…

NAIROBI (Capital Markets in Africa) – Kenyan credit costs that prompted the introduction of interest-rate caps last year have remained high despite the government’s efforts, according to the central bank. Authorities in East Africa’s biggest economy instituted a 400 basis-point rate cap above the prevailing benchmark measure for commercial loans last year with the view to making credit more affordable. Instead, banks now lend only to the least risky clients and the government. “Some of the structural…